Magcalas v. Magcalas, 2020 ONSC 595

COURT FILE NO.: FS-18-3386-0000

DATE: 20200210

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Regina Magcalas

Applicant

– and –

Francisco Magcalas

Respondent

In Person

In Person

HEARD: January 20, 2020

J.T. Akbarali J.

Overview

1The parties to this litigation were married on August 5, 1998 and separated on February 20, 2015. There is one child of the marriage, F, who is now 19 years old and a full-time student.

2The applicant wife brought her application on June 22, 2018, seeking a divorce, child support, and spousal support. In his amended answer, the respondent husband claims child support, equalization of the value of net family property, and a restraining order.

3At a case conference before Gilmore J. on July 5, 2019, the parties consented to an order that the husband’s pension plan administrator transfer to the wife’s RRSP account the maximum share of the family law value of the husband’s pension, or $44,398.00, and they consented to an order severing the divorce from the corollary relief.

4At a subsequent case conference on August 19, 2019, Gilmore J.’s endorsement recorded the parties’ agreement that they would share the proceeds of sale of the two properties the wife owns in the Philippines. The endorsement notes that the wife indicated that her share would go to the parties’ daughter.

5Some issues remain outstanding between the parties. In addition, the parties raise issues arising out of their agreements about the properties in the Philippines and the pension. I must determine the following issues:

a. What child support orders, if any, should be made?

b. Is the wife entitled to prospective spousal support, and if so, how much?

c. Is the wife entitled to retroactive spousal support, and if so, how much?

d. Is the wife entitled to any interest on the transfer of funds from the husband’s pension to her RRSP?

e. Is the husband entitled to repayment of alleged post-separation debts totaling $3,000 from the wife?

f. What, if any, orders should be made regarding the property in the Philippines?

6Although the husband sought a restraining order in his amended answer, no evidence or argument was made on the issue at trial. I thus conclude it was abandoned.

7I turn now to the analysis of the issues.

Child Support

8The parties’ daughter, F, remains a child of the marriage because, although she is 19 years old, she is a full-time student.

9F lived with the wife from the time of the parties’ separation until shortly before she turned 18 on September 2, 2018, when she moved in with the husband. The wife states F moved out just days before her birthday. The husband states F began living with him at the end of July 2018.

10While F was living with the wife, the husband paid child support. Now that F is living with the husband, he seeks an order for child support. He is paying for F’s expenses, including her college tuition and related expenses. He seeks the wife’s contribution.

11The wife is obligated to pay table support for F and to contribute to her s. 7 expenses in proportion to her income. The husband testified that F’s post-secondary expenses are $2,560 per year, consisting of tuition, uniform, and school supplies. These costs are in addition to F’s living expenses, which are better accounted for under a calculation of table child support.

12The real question is whether there is any amount of child support payable given the wife’s income. I will thus consider the question of amount of child support together with my analysis of spousal support and the parties’ incomes.

Spousal Support

13When considering whether to make an order for spousal support, the court must consider the condition, means, needs and other circumstances of each spouse, including the length of time the spouses cohabited, the functions performed by each spouse during cohabitation and any order, agreement or arrangement relating to support of either spouse: Divorce Act, R.S.C. 1985, c.3 (2nd Supp.), s. 15.2(4).

14The condition of a spouse includes factors such as their age, health, needs, obligations, dependents and their station in life. The means of a spouse includes all financial resources, capital assets, income from employment and any other sources from which the spouse derives gains or benefits. The needs of a spouse take into consideration the accustomed lifestyle of the spouse, subject to the ability to pay: Thompson v. Thompson, 2013 ONSC 5500, W.D.F.L. 4400, at para. 47.

15Section 15.2(6) of the Divorce Act provides that a spousal support order has the following objectives:

a. To recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

b. To apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

c. To relieve any economic hardship of the spouses arising from the breakdown of the marriage;

d. To promote the economic self-sufficiency of each spouse within a reasonable period of time insofar as it is practicable.

16All four objectives must be considered when spousal support is claimed; no single objective is paramount: Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813, at p. 852.

Is the wife entitled to spousal support?

17The parties were married for over 16 years. At the beginning of their marriage, the parties were a team. Both worked outside the home. Both did household chores. Their daughter was born in 2000, and both were involved parents who shared child care duties.

18In 2001, the wife was involved in a car accident which changed her life. She testified that she has been suffering from many health problems since then and has not worked since the accident.

19The wife testified that she has had two surgeries to fix a hole in her eardrum, but these were unsuccessful. She testified that she has ongoing back and neck pain. She testified that she has severe depression, and she suffers from stress and anxiety. She testified that she has been to hundreds of doctors’ appointments, many of them with the husband, but her health is not improving.

20The wife testified that, during the marriage, the husband would grow frustrated with her and accuse her of not doing what she could, or of not contributing. She testified that she felt that the accident had robbed her of the joy in her life. She used to enjoy dancing and being active, but now she is envious of people who can walk without pain.

21The wife testified that she has never been able to work outside the home since her accident. She did return to school to complete a business analyst certificate on a part-time basis. It took her 1-2 years. She testified that she has applied for hundreds of jobs, including as a business analyst, but no one will hire her. She thinks her depression, anxiety, and back pain make her an undesirable candidate.

22The wife applied for CPP in 2008 based on her disability and was approved. The medical report, prepared by her physician and filed with her CPP application, records chronic pain after her accident in her neck, shoulder, lower back, and leg. It records that she suffers from depression and anxiety, hearing loss, and ear pain.

23The form records her functional limitations. These include pain with walking, running, and jumping, pain with lifting objects, and poor sleep due to pain. The form records no improvements in the past, and no expectation of improvement.

24The wife also put her MRI reports into evidence, but there was no witness to interpret these for the court.

25The wife’s medical evidence is consistent with her claims of inability to work due to disability, but the medical evidence is dated, and no physician gave evidence.

26The wife was successful in her application for CPP based on her disability.

27The husband disputes the wife’s claim of disability. On cross-examination, he put to her that she used to help him carry heavy 18.1 L bottles of water that they would then sell. She agreed she had been with the husband when he got water bottles to sell, but she testified that he was the one who moved them.

28The husband also argued that the wife is not disabled because she is able to drive, and he has seen her in the shopping mall. He states that she was able to get groceries on her own, including heavy groceries. He stated she did housework after the accident, including laundry, cleaning the bathroom, cooking, and said she could move the furniture. She testified that her ability to complete household tasks was limited after the accident.

29I accept the wife’s evidence that she has serious health problems arising out of her accident. The parties were married for over 16 years and have been separated almost five years. The wife is currently making ends meet through CPP payments and the temporary spousal support payments that the husband has been making. I analyze the parties’ income and means below, but as will be apparent, I conclude that the wife has financial need. The wife has established a claim for non-compensatory, needs-based support.

The Wife’s Income and Means

30The wife provided evidence of her income, including a record of her CPP payments and her Notices of Assessment.

31The evidence shows that she received $658.57 in CPP monthly in 2019, $888.40 monthly in CPP between January and September 2019, and $643.76 monthly between October and December 2018, and $875.27 monthly in 2017. The wife did not explain reduction in the amount of her CPP payments in 2018, but I note it occurred at the same time her daughter turned 18 and moved out to live with the husband. The wife did not explain why her evidence about her CPP receipts goes up to September 2019 as opposed to the date of trial.

32The wife’s Notices of Assessment set out her Line 150 income as follows: 2018 - $7,725; 2017 - $7,611; 2016 - $10,718; 2015 - $8,139.

33The husband argues that the wife is capable of working and that she has hidden income.

34I reject the husband’s argument that the wife has hidden income. The wife admitted to twice trying to make money by signing up for a multi-level marketing company. She states she never made any money, and in fact, lost the membership fee she was required to pay. I accept this evidence.

35The husband also argues that the wife earns rental income. The wife admitted to renting a room to a woman who was undergoing a separation for $200/month. However, she testified that the woman stayed only for a few months and did not pay her rent the last month she was there. I accept this evidence. The amount she received was negligible, and I discount it.

36I thus conclude that the wife’s line 150 is her actual income. The next question is whether I should impute a higher income to the wife on the basis that, as the husband argues, she is capable of working.

37Section 19(1)(a) of the Federal Child Support Guidelines, SOR/97-175, provides that the court may impute income to a spouse as it considers appropriate in the circumstances, which circumstances include:

a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse.

38In making his argument that the wife is capable of working, and thus should be imputed income, the husband relies on the same evidence he relied on to establish that the wife is not disabled. At best, even if accepted, that evidence does not establish anything more than that the wife is capable of some household maintenance. It does not speak to what kind of work the wife might be able to do, or what kind of income she could earn.

39I note the wife’s evidence that she managed to complete part-time studies, taking three courses over a period of one to two years to obtain her business analyst certification. It thus appears that the wife is capable of some occupation outside the home, albeit a limited one, in view of her health problems. I also observed the wife to have difficulty organizing her thoughts or staying focused on the issues during the trial. I thus have concerns about the wife’s ability to take on a business analyst role, although she has the certification for it.

40In my view, the wife ought to be able to do a minimum wage job on a part-time basis. However, in my view, it is not reasonable to expect the wife to work more than 12 hours a week given her health challenges. At $14/hour, assuming the wife worked 48 weeks a year, she could earn $8,064 in income. This income is in the range of her CPP benefits, however, if she were to obtain a job earning this income her CPP benefits would be clawed back in a corresponding manner. It follows that the wife is not unemployed or under-employed within the meaning of s. 19(a) of the Federal Child Support Guidelines. I accept that her income is accurately reported in her Notices of Assessment. I thus conclude that her income is as follows: 2018 - $7,725; 2017 - $7,611; 2016 - $10,718; 2015 - 8,139. For 2019, I have extrapolated the evidence I have about her CPP payments over the course of the year, because she did not testify that her CPP benefits have ceased. Accordingly, I conclude that her 2019 income is $7,902.84. As this is the most recent income information available for the wife, I will use it for her 2020 income as well.

41With respect to the wife’s means, she owns two properties in the Philippines which I address below, and she has received a transfer of funds from the husband’s pension, which I also address below. In effect, the parties have reached agreements that have, or will, equalize the value of the pension and the properties. The agreement with respect to the properties will require their sale. The wife may receive funds from the properties, although she has promised them to her daughter. The wife also has debt on a line of credit. She is not able to generate meaningful income from her assets.

The Husband’s Income and Means

42The husband is a T4 employee. The parties agree that his annual income for 2019 is $54,289.00. I will also use this income prospectively, as his income for 2020.

43The husband’s Notices of Assessment report his income as follows: 2017 – $52,040; 2016 – $51,856; 2015 - $54,275. His T4 for 2018 shows income of $51,850.

44In terms of the husband’s means, he also has his pension and is entitled to half the value of the property in the Philippines. Together with his daughter, he owns a 2008 Dodge Caravan that he values at $6,000. He carries consumer debt. I note that he has paid off significant debt that he held at separation of about $40,000. He testified that at least some of this was joint debt that he solely paid off. However, I do not know what proportion of the debt was joint.

What quantum of support is payable?

45The husband argues that he has no ability to pay spousal support. Since F came to live with him, the husband has been meeting her living and tuition expenses without assistance from the wife. His financial statement shows monthly expenses that exceed his income. The husband is currently paying $700 monthly in spousal support and so far, has taken no deduction for spousal support payments made. Based on his financial statement, his monthly shortfall is $2,238. Even without the spousal support payment, his expenses exceed his income. The husband is carrying significant debt, including an overdraft of almost $2,000 in his bank account, $10,000 on his line of credit, and about $4,500 on his credit card.

46Considering prospective support, I have prepared a DivorceMate calculation, attached at Schedule A. This calculation reflects 2019 income and s. 7 expense information. Because it is the most current information available, I use this calculation to consider prospective support.

47First, it is apparent from the calculation that the wife’s income is too low for her to have a child support obligation. No child support is payable pursuant to the Federal Child Support Guidelines.

48Second, the spousal support guidelines calculate a range of spousal support between $678 monthly at the low end, to $904 monthly at the high end. Midrange spousal support is $791.

49In my view, spousal support at the low end of the range is appropriate. I reach this conclusion because the husband bears the sole responsibility of financially supporting the parties’ daughter. In view of his obligations to the parties’ child, and his income and means, he cannot afford to pay support at more than this level.

50However, spousal support at the low end, $678 monthly, assumes that the wife is contributing 25.8% to F’s post-secondary expenses, when in fact the husband is paying the whole expense. In my view, it is just to adjust the low end of spousal support downwards to take into account the wife’s share of F’s post-secondary expenses. Her share, or $55 a month, should be deducted from the low end of the range. Given the parties’ income, the tax implications of approaching support in this manner are not significantly different than requiring the wife to pay s. 7 expenses to the husband while requiring the husband to pay low end spousal support to the wife.

51Accordingly, I order that prospective spousal support be paid, commencing on February 1, 2020 in the amount of $623 monthly.

Is any retroactive support owing?

52The husband seeks an order for retroactive child support. The wife’s income has not been high enough at any point since F moved to live with the father to trigger a child support obligation. Accordingly, no retroactive child support is owing.

53The wife seeks an order for retroactive spousal support back to the date of separation. At trial, she stated that the only reason she was seeking retroactive spousal support was because the husband was seeking repayment of the alleged $3,000 in loans and retroactive child support from her.

54The husband has been paying spousal support in the amount of $700 monthly since the endorsement of Monahan J. dated November 30, 2018.

55When considering whether to make a retroactive spousal support order, or adjustment, the court must consider the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 207.

56In my view, it is not just in this case to make any order for retroactive spousal support. I reach this conclusion because, although I accept that the wife has need, the husband is struggling financially, in part because he is the sole financial support to the parties’ daughter. Certainty about his spousal support obligations is very important to him so he can try as best as he can to arrange his affairs responsibly. A retroactive spousal support award would cause significant financial hardship to him, at a time when his expenses are high in view of F’s post-secondary expenses.

57Moreover, there is no suggestion that the husband behaved improperly in not paying spousal support earlier. When the wife raised the question of spousal support, the husband entered into a temporary consent order and has made all the support payments required by that order.

58In addition, the wife admitted that she sought retroactive spousal support because the husband was seeking retroactive child support and repayment of alleged debts from her. I address the debt below, but it is enough to note here that her explanation for the delay in asserting her right to spousal support is not persuasive. The retroactive spousal support claim was either a shield to use against the claims made against her, or an effort to get back at the husband for seeking money from her for child support and the repayment of the alleged debts.

59Although arguably the husband could seek to adjust retroactively the support he paid since Monahan J.’s order, the difference between what he paid and what would have been owing is not material, given that I am not ordering retroactive support. In my view, it is just that the support already paid not be adjusted either. I note that retroactively adjusting the spousal support that has been paid downwards would be hardship to the wife, given her small income.

60Accordingly, I make no order for retroactive child or spousal support.

Property-related Issues

61I turn next to consider the property-related issues. Although the husband claimed an equalization of net family properties in his amended answer, the parties did not make argument about an equalization payment, nor did they prove or attempt to prove any items on their financial statements as they related to the property division. I received one net family property statement, but no one gave evidence about it or made submissions on it. Rather, the parties’ arguments focused on agreements they had made with respect to property as well as a claimed debt. I thus address the property issues as the parties have approached them.

Interest on the Funds Transferred from the Husband’s Pension

62At the conference before Gilmore J. on July 5, 2019, the parties reached an agreement about the transfer of funds from the husband’s pension to the wife’s RRSP. The endorsement reads:

On consent, the OMERS Plan Administrator to transfer to the Applicant’s RRSP account the maximum share of the Applicant’s Family Law Value of the Respondent’s pension or $44,398.00. The valuation date is February 20, 2015 and the date of marriage is August 5, 1998.

63The parties took out a formal order which includes this term in substantially the same language.

64The wife argues that, in addition to the $44,398.00 that was transferred to her, she should also be entitled to interest on the pension funds, which she calculates at about $18,000.

65I note that, at an exit trial management conference with Kristjanson J., the wife was told she had to amend her pleadings to assert this relief. She did not do so. However, the husband amended his answer, and seeks equalization of the value of net family property. As a result, I will consider the wife’s request.

66The husband argues that the question of the pension was dealt with fully at the conference, and no further amount should be transferred to the wife. He also notes that according to OMERS, the interest that could be transferred is the interest that accrued on $44,398.00 between the date of separation and the date of transfer. The OMERS documents in evidence suggest that it has calculated this amount to be $3,851.78. OMERS has indicated to the parties that to pay out interest, the wife’s share of the pension would either have to be expressed as a percentage of the family law value of the pension, or, if expressed as an amount, the order would have to specifically provide for the payment of interest.

67I provided the parties with a copy of the decision in Heringer v. Heringer, 2014 ONSC 7291, 124 O.R. (3d) 195, and advised them to read it and consider whether to make any submissions about the wife’s request for interest in view of this decision. Neither party made any reference to the case in closing submissions. I read portions of it to the wife and asked for her comments. She indicated to me that she did not really know what to say about the case, but that she thought she should be entitled to interest.

68In Heringer, the parties entered into an agreement for a “global settlement payment” of $137,000 payable by the husband to the wife by means of transfer of a portion of his pension. The pension administrator transferred the $137,000 without interest to the wife, who then sought a court order for the interest.

69The court held that the legislation does not support an interpretation that allowed the court to order that interest be added to the amount the parties agreed would be transferred. The court found that the terms of the order were clear and unambiguous. There was no way to determine, and no reason to attempt to determine, whether the settlement figure did or did not include interest (Heringer, at paras. 33-34).

70The order in this case is also clear and unambiguous. It expresses the wife’s entitlement to a fixed amount of the family law value of the pension and it is silent as to interest. In view of the decision in Heringer, there is no basis to add interest to the amount the parties agreed would be transferred.

71The wife’s request for interest on the funds transferred from the husband’s pension to her RRSP is therefore dismissed.

Post-separation Loans from the Husband to the Wife

72The husband argues that he made three loans to the wife post-separation for which he seeks repayment. I note that, strictly speaking, this relief is not sought in his answer, which seeks only child support and equalization of the value of net family property.

73However, both parties addressed the alleged loans in their evidence. In view of rule 2(2) of the Family Law Rules, O. Reg. 114/99, which sets out the obligation to deal with a case justly, I take note of the fact that the parties are self-represented and conclude it is just for me to address this issue despite the irregularity in the pleading.

74The husband gave evidence that after separation he advanced $3,000 to the wife in total.

75First, he testified that in 2015 or 2016, he was visiting the Philippines when he received a call from his daughter asking him to lend the wife money for a plane ticket for her, or possibly one of the wife’s siblings, to travel to the Philippines due to an emergency. He states he borrowed $2,500 from his siblings and sent the money to the wife via Western Union. Eventually he narrowed his evidence down to state that he loaned her $2,500 in April or May of 2015.

76Second, he testified that in 2015, the wife’s car broke down and she asked him for $250. He states he gave her cash in front of their daughter, who was a witness.

77Third, he testified that in the summer of 2016, the wife’s sister was hospitalized in the Philippines. The wife asked him for money to send to her sister, and he gave her $250 in cash.

78F gave brief evidence about these alleged loans.

79She testified that, when the husband was in the Philippines, the wife learned that her mother was dying. She asked F to call the husband using F’s Facebook messenger account. F testified that she called the husband, said hello, and then gave the phone to the wife who wanted to ask the husband to borrow money for a plane ticket. F did not know the amount.

80With respect to other loans, F said that the wife would ask the husband for money if she needed her car fixed or if one of the wife’s siblings needed help. F said she saw the father give the mother cheques. F denied the cheques were for child support.

81For her part, the wife said she could not remember any of the loans that the husband states he gave her.

82There is no documentary evidence to support any of the loans.

83I find that the husband has not proven that the loans were made on a balance of probabilities. There should have been documentary proof of the money that the husband states he sent by Western Union, but none has been provided. F’s evidence establishes that the wife asked for money, but it does not establish that the husband provided it, or in what amount. There was also some inconsistency in F’s and the husband’s evidence about who asked the husband for a loan. According to the husband, F asked for the loan for the wife, while F said she made the call to the husband on her phone, but the wife asked for the loan.

84The other loans are also uncorroborated. F’s evidence establishes that the wife asked for loans, but it does not prove any specific loans. I note the inconsistency between F’s evidence that loans were made by cheque, with the husband’s evidence that loans were made in cash.

85The wife does not acknowledge or admit to any of the loans. There are no text messages or emails between the parties about the loans. The husband may have loaned money to the wife, but he has not proven the details of the loans, and without certainty as to what was advanced, I cannot order anything to be repaid.

86The husband’s claim for repayment of $3,000 in loans is dismissed.

The Properties in the Philippines

87The wife owns two properties in the Philippines. There was no valuation of the properties in evidence, but the parties accept that together, the properties are worth about $50,000.

88The parties reached an agreement about the Philippines properties which Gilmore J. recorded in her endorsement of August 19, 2019 as follows:

The parties have agreed that they will share the proceeds of the sale of the two properties owned by the applicant in the Philippines. The applicant has indicated that her share is to go to the parties’ daughter.

89I note that, although the endorsement does not reflect the proportion in which the parties will share the proceeds of sale, the parties each agreed in their evidence that they are to share the proceeds of sale equally. The wife maintains that she will give her share of the proceeds to her daughter.

90The husband argues that this arrangement is not acceptable. He seeks a cash payout of the property, or a transfer of title to his name. He is concerned that the wife is not taking steps to sell the properties.

91The wife states that it will cost $10,000 to transfer title into the husband’s name, and she would only transfer half anyway because she wants to be the one to give her 50% to F. She states she would transfer the title if the husband paid the costs. She would also transfer title to the husband and F equally if the husband paid all the costs.

92The parties have thus reached an agreement about the Philippines properties. They have agreed to share the proceeds of sale equally. The wife intends to give her share to the daughter, but that intention is not expressed as part of the agreement in Gilmore J.’s endorsement.

93The court does not have the jurisdiction to change the terms of the agreement to require the wife to transfer title to the husband, or to the husband and F. Nor does the court have the jurisdiction to change the parties’ agreement to require the wife to pay out the husband for his 50% share of the proceeds of sale.

94The court does not have in rem jurisdiction over the properties in the Philippines. Only the courts in the Philippines have that jurisdiction. This court’s jurisdiction is limited to jurisdiction over the parties. I can only make in personam orders – that is, orders that direct the parties what to do to enforce their agreement.

95In my view, it is necessary to first clarify the order of Gilmore J. to reflect the parties’ agreement that they share the proceeds of sale of the properties in the Philippines equally. I thus order that the parties shall share equally the net proceeds of sale of the properties owned by the wife in the Philippines.

96However, that order is meaningless without any enforcement mechanism. In my view, by resolving the issues about the properties in the manner they did, it is implicit that the parties intended that the properties be listed for sale within a reasonable time. I thus order the wife to take steps to list the properties for sale within two weeks of delivery of these reasons.

97The wife gave evidence that she requires the husband’s help to find a buyer for the properties. I thus order both parties to take all steps available to them to search for a buyer for the properties in the Philippines.

Costs

98Each party claims $1,000 in costs for this litigation.

99In my view, success of this trial is divided. This is an appropriate case for each party to bear their own costs of the litigation.

Conclusion

100In conclusion, an order shall go incorporating the following terms:

a. Commencing February 1, 2020, the husband shall pay monthly spousal support in the amount of $623 to the wife. This amount shall be taxable to the wife and deductible to the husband.

b. The husband’s claim for prospective and retroactive child support from the wife is dismissed.

c. The wife’s claim for retroactive spousal support from the husband is dismissed.

d. The wife’s claim for interest on the transfer of funds from the husband’s pension to her RRSP is dismissed.

e. The husband’s claim for repayment of debts totaling $3,000 from the wife is dismissed.

f. The wife shall take steps to list the properties she owns in the Philippines for sale within fourteen days.

g. Both parties shall take all steps available to them to search for a buyer for the properties in the Philippines.

h. The parties shall share equally the net proceeds of sale of the properties in the Philippines.

J.T. Akbarali J.